Two of the largest health insurers in the country are terminating Medicare Advantage coverage for about 1 million older Americans, CBS News reported.
Humana and UnitedHealthcare both announced they are eliminating specific Medicare Advantage offerings starting next year, citing elevated operational costs and higher medical usage across the healthcare industry. Humana said its exits will affect approximately 600,000 enrollees, while UnitedHealthcare confirmed plan closures affecting about 390,000 members, according to CBS News. Both companies said they plan to offer alternative coverage options to most affected participants.
A nationwide contraction of private plans
The cancellations arrive as the nationwide Medicare open enrollment window, which started Oct. 15, runs toward its Dec. 7 deadline. Medicare Advantage allows private carriers to manage benefits for older Americans who opt out of traditional federal Medicare. More than half of the 70 million people enrolled in Medicare choose private Advantage plans, NPR reported, drawn by lower upfront premiums and added benefits such as vision and dental care.
However, insurers have increasingly pulled back from unprofitable geographic markets over the past three years, according to research published in JAMA and reported by NPR. Last year, 2.9 million enrollees were enrolled in plans that shut down. For the upcoming year, an analysis by the podcast “An Arm and A Leg” showed that at least 2 million people will be affected, with other estimates climbing between 3.2 million and 5 million seniors, NPR reported.
The pullout is leaving wide swaths of the country with no private options at all. In 193 U.S. counties, primarily in rural communities, insurers will offer zero Medicare Advantage plans, up from about 120 counties last year, according to an analysis of federal records by health policy research group KFF. Major metropolitan areas are also seeing deep cuts. Cities including Dallas, Houston, Minneapolis, Seattle and Portland are losing between one-quarter and one-third of their available Medicare Advantage choices, NPR reported.
Regional carriers are feeling similar strain. In Minnesota, Blue Cross and Blue Shield of Minnesota cited more than $500 million in Medicare losses over the last three years while restructuring its offerings and discontinuing coverage in rural areas such as Crow Wing and Wadena counties, the Brainerd Dispatch reported.
Navigating changes before open enrollment closes
Seniors who lose their coverage must actively explore alternatives before Dec. 7. If an individual does nothing after their plan ends, the insurer will automatically move them to another Medicare Advantage plan or the federal government will assign them to traditional Medicare, NPR reported. However, an automatic transfer to original Medicare includes only Parts A and B, leaving individuals without prescription drug coverage or supplemental protection.
Traditional Medicare covers 80 percent of outpatient care and doctor visits without an annual out-of-pocket cap, leaving patients exposed to the remaining 20 percent of costs unless they obtain supplemental coverage, Dan Weissmann, host of “An Arm and A Leg,” told PBS News. Beneficiaries who transition because their Advantage plan was discontinued qualify for a special rule allowing them to buy a Medigap supplemental policy without standard pre-existing condition restrictions, NPR reported.
Health specialists caution that enrollment rules carry additional complications this year. Federal regulators have permitted insurance providers to place enrollment limits on certain remaining Medicare Advantage options, according to NPR and PBS News. Because those plans operate on a first-come, first-served basis, popular offerings may shut out applicants who wait too long.
Counselors recommend that seniors inspect notices received by mail and seek guidance through the federal 1-800-MEDICARE hotline or state-level State Health Insurance Assistance Programs, known as SHIP, to evaluate local doctor networks, medication formularies and out-of-pocket thresholds before the open enrollment period ends.
